Bitcoin Market Analysis: Insights into Recent Fluctuations
The recent tariff announcement on October 10 by United States President Donald Trump created a ripple effect in the cryptocurrency universe. Bitcoin (BTC) saw a dramatic drop in value, plummeting to approximately $102,000 for the first time since August. The market experienced a staggering loss of nearly $800 billion in market value, with $19.2 billion in positions wiped out, marking one of the most significant liquidations in the history of cryptocurrencies.
Despite this turmoil, Bitcoin seems to have found temporary stability around the $111,000 mark. However, recent on-chain data suggests that this calm might be short-lived, casting a shadow over Bitcoin’s immediate future.
Is the Market Reset Complete? Expert Insights
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According to a detailed analysis by XWIN Research Japan, shared on the CryptoQuant platform, the Bitcoin market may not have reached its local bottom yet. The research draws parallels with previous years when Bitcoin underwent psychological resets. The current market scenario can be differentiated from past events through the Bitcoin Net Unrealized Profit/Loss (NUPL) metric.
The NUPL metric provides a snapshot of the profitability of BTC holders by assessing the discrepancy between unrealized profits and losses. Historically, such as in March 2020 and November 2022, Bitcoin’s NUPL dropped below zero, indicating that investors were holding BTC at net losses. These downturns often prefaced robust bull markets. In contrast, the current NUPL hovers around 0.5, suggesting that a substantial number of holders are still experiencing profits.
Calm Before the Storm? Decoding Bitcoin’s Slowdown
To understand the mechanics behind Bitcoin’s recent sluggish momentum, XWIN Research analyzed the Bitcoin Long Liquidations metric. This metric tracks the total value of leveraged long positions that are forcibly closed due to market wipeouts.
In the latest market downturn, heavily leveraged long positions were liquidated. However, this was not the only occurrence. The Open Interest, which reflects the total number of outstanding derivative contracts, also declined as BTC’s price dropped, contributing to a normalization of the derivatives market.
Historical patterns from 2018-2019 and 2022 indicate that initial market dumps clear leverage. The true market bottoms tend to surface months after these wipeouts, during periods dominated by fear and losses. Presently, the market appears to be in a pre-capitulation phase, with its stability appearing precarious.
The current sentiment among investors remains relatively stable. Nonetheless, if fear increases and Bitcoin’s NUPL approaches zero, it could trigger a new, sustainable rally. As of the latest updates, Bitcoin is trading at approximately $111,110, with no significant growth over the past 24 hours.
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